A put option on a stock has an exercise price of $35. If the stock price...
A put option on a stock has an exercise price of $35. If the stock price at expiration is $30, what is the option payoff per share for the seller of the option? A) $0 B) -$5 C) $5 D) $35 E) -$35
Homework Answers
Ans B) -$5
At the expiration of the stock the buyer of the Put option would take the option and Put the option at $35 due to which the seller of the stock will bear the loss of $5 per share. However the seller would reduce the premium amount received from this.
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